Chancellor: Why China is crucial to Northern Powerhouse

By Chancellor George Osborne and Lord O’Neill, Commercial Secretary

We are determined to put the North back where it belongs: on the global map.

That’s why this week we have been travelling all over China – and have taken the Northern Powerhouse with us.

We have invited both Labour and Conservative city leaders from across the North to join us – along with the heads of some great Northern businesses – as we showcase projects that will mean new jobs and investment in Britain.

All this week, we are using our ministerial trip to advertise the great infrastructure projects that need private investment in this region and will create thousands of new jobs.

Today, we are launching a Northern Powerhouse ‘pitch book’ highlighting projects for Chinese investors to consider, with over £24 billion worth of opportunities opened up. In particular, we have been promoting the North’s world-beating science, education and technology sectors.

For Sheffield that means that Chinese investors have seen first-hand this week the opportunities to get involved in projects such the Advanced Manufacturing Innovation District – a hugely exciting project which will create a centre of excellence in metals and materials manufacturing right beside the M1.

It is also crucial for local leaders from the North to form their own relationships with their Chinese counterparts. The Mayor of Liverpool Joe Anderson, the leader of Manchester City Council, Sir Richard Leese and the leader of Trafford Council Sean Anstee have all forged strong connections this week and we’ve also asked the leaders of some of the great northern businesses to join us too.

Today we announce plans to take the Northern Powerhouse to the next level, including potentially doubling enterprise zones across the North, a commitment to reinvigorate partnerships between Northern and Chinese cities, including Sheffield’s sister city agreement with Chengdu; and a new Chevening-Manchester scholarship scheme to strengthen Northern Powerhouse ties with the 1,000 Chinese students that arrive in Manchester each year to study, as well as their wider communities back in China.

Why is China so crucial to the development of the Northern Powerhouse?

By 2030, China is expected to be the world’s largest economy. Its growth story has been remarkable. Every two years it creates an economy that is the same size as that of Australia.

Over the last few months we have seen instability in Shanghai markets which spread across global markets. But that shouldn’t put us off. Even if China’s growth slows, it will still be a crucial engine for the world economy, with extraordinary opportunities for businesses in the North.

If anything, events like the stock market instability we saw over the summer should serve as a reminder to get our own house in order by finishing the job of repairing the public finances. We need to continue working through the long-term economic plan to secure a brighter future for working people across the North.

And we’re determined to make sure that the whole of the UK benefits.

We must do this by firing up every corner of the Northern economy - from transport to science to culture - to help end the decades-old gap between the North and the South.

Of course, government investment plays a crucial part in this. That’s why we’re funding projects in areas such as transport, where we have committed £13 billion to transform infrastructure across the North, and science, where we’ve invested £235 million for the Sir Henry Royce Institute, leading the world in the development of advanced materials, to benefit the whole of the region.

We also want to revolutionise the way our cities, towns and counties govern themselves by shifting powers from Whitehall to local leaders who are better placed to take the decisions that affect their communities.

Some of your civic leaders who are pioneering this change in the way our country is governed are with us in China, and tell us they are determined to take advantage of what we want to be a golden decade in UK-China relations.

We face a critical moment in our relationship with China. We need to strengthen our economic ties, redouble our efforts to support British firms selling goods there, and attract more investment into the Northern Powerhouse.

Rather than fearing China’s rise, we must and will make the most of the opportunities it provides for us right across this One Nation.